15 octobre 2019, 10h30–12h00
Economic Theory Seminar
We provide a theory of conversations based on plausible deniability in the face of potential public outrage. Two experts with common preferences and some private information exchange messages in order to coordinate on a decision. An uninformed regulator (perhaps the public) has a conflict of interest with them, fully understands the intended meaning of all messages, and can overrule their decision. We identify conditions under which the experts can subvert the regulator's agenda, i.e., they implement the same (first-best) decision rule that they would implement if the communication was completely private. Subversive communication necessarily takes the form of a back and forth conversation.